'BULL****': GORE AND OTHER
ADMINISTRATION POLICY MAKERS SYSTEMATICALLY IGNORE EVIDENCE OF CORRUPTION OF
THEIR 'PARTNERS'

THE OLD GUARD:
Left to right, former Russian
Prime Minister Viktor Chernomyrdin, a Communist-trained technocrat and
Soviet industrial manager; a portrait of Soviet dictator Josef Stalin; and
Vice President Al Gore, who supported Chernomyrdin's requests for subsidies
to the Russian central government. Gore ignored evidence of Chernomyrdin's
corruption. He and Chernomyrdin met in Stalin's country house in a Moscow
forest on July 14, 1996. AP Photo/Pool

The truth
about corruption is difficult to hear and difficult to speak. But once the
truth is spoken and heard and known, the truth itself acquires a power that
can transform nations and our world.

Vice President Al Gore,
February 26,
1999

There have
been a lot of charges and innuendo [about Viktor Chernomyrdin] but there has
been no proof, no smoking gun, and certainly no indictment in a Russian
court.

Leon Fuerth (Al Gore's National Security Adviser), as
quoted in the Washington Post, July 27, 2000

Facts are
stubborn things.

President Ronald Reagan,
August 15,
1988

The 1995 CIA
Report

In 1995, CIA officials dispatched to the White House a
secret report based upon the agency's large dossier documenting the corrupt
practices of then-Russian Prime Minister Viktor Stepanovich Chernomyrdin, who
with Vice President Gore co-chaired the Gore-Chernomyrdin Commission. The
private assets that Chernomyrdin had accumulated in his official position,
according to Russian security sources, ran into the billions of
dollars.1 When the confidential classified
report on Chernomyrdin reached Vice President Gore, however, he refused to
accept it. Instead, he sent it back to the CIA with the word "BULL****" scrawled
across it.2

When the New York Times first reported
these grotesque facts, White House and CIA officials denied that the report
existed. The National Journal, however, reported approximately six months
later that it had independently confirmed the Times account.3 A few months later still, the Washington Post
wrote that CIA sources, "had it that the report came back with 'bull----!'
scrawled in the vice president's handwriting."4

It is difficult to imagine a more dangerously
intemperate reaction by the vice president to official corruption in Russia. Yet
this was hardly an isolated incident. The administration had ignored repeated
earlier warnings of corruption by Chernomyrdin and other senior Russian
officials. Several senior Clinton administration officials have confirmed that
they had received a number of reports from the CIA alleging corruption by
Chernomyrdin, and that the CIA had submitted many other reports alleging
corruption among other senior Russian leaders, including Anatoly B.
Chubais.5 "My review of CIA's published
material persuades me that it has reported to its readership persuasively and in
depth that crime and corruption are pervasive problems in Russia," said a CIA
ombudsman tasked with investigating the CIA's work after the first New York
Times article about the vice president's "barnyard epithet"
appeared.6

It is therefore clear that the vice president
rejected not an initial report unsupported by other evidence, but rather a
detailed report built on extensive earlier work by the CIA of which Gore must
have been aware. Moreover, the allegations against Chernomyrdin were made in the
context of numerous charges against other senior Russian leaders--suggesting
widespread corruption at the top levels of the Russian government.

Gore's close personal relationship to Viktor
Chernomyrdin--and not any superior intelligence that he possessed as Vice
President--was therefore obviously decisive in his emotional dismissal of the
CIA intelligence report of Chernomyrdin's corruption. At the same time that he
was receiving reports of Chernomyrdin's corruption and the growing anger of the
Russian people over the power of the oligarchs, the vice president was effusive
in his public comments about Chernomyrdin. In June 1995, as they stood together
in Moscow, he displayed his lack of objectivity. "Friends have a right to be
proud of friends," Gore proclaimed. He added: "The longer one works with
[Chernomyrdin], the deeper one's respect grows for his ability to get things
done."7

Chernomyrdin
Allegations--No Secret

The Clinton-Gore administration's knee-jerk
dismissal of top-secret corruption allegations against Viktor Chernomyrdin was
all the more remarkable taking into account the extensive information available
in open sources, including the Russian and U.S. media.

For example, in the summer of 1995 a respected
U.S. analyst of Russian affairs wrote a comprehensive article in the
Washington Post detailing wide-ranging charges against the Russian prime
minister.8 Peter Reddaway, a political
science professor at George Washington University and former director of the
Kennan Institute for Advanced Russian Studies, cited accusations by Boris
Fyodorov, who had served as Russia's Deputy Prime Minister for Finance, that
Chernomyrdin illicitly obtained significant holdings of stock in Gazprom,
Russia's gas monopoly, during the firm's privatization--a privatization that
Fyodorov characterized as "the biggest robbery of the century, perhaps of human
history."9 Chernomyrdin was thus made one of
the ten richest men in Russia (Gazprom was worth up to $700 billion). Reddaway
also noted similar charges by Vladimir Polevanov, also a former Deputy Prime
Minister, in a nationally televised interview in Russia. The New York
Times reported in July 1995 that Chernomyrdin's son was building "an
enormous country home" in a Gazprom compound, and that he was also thought to be
"one of the company's largest shareholders."10

Chernomyrdin's continuing links to Gazprom after
his entry into government were also widely reported. In fact, a March 1995,
cable from the U.S. Embassy in Moscow signed by then-Ambassador Thomas Pickering
directly alluded to Chernomyrdin's continuing involvement with Gazprom after he
entered government, and with Gazprom's extraordinary influence over the
government:

A former 'Gazprom' director--Viktor
Chernomyrdin, who Embassy sources report spends a significant amount of his
time on 'Gazprom' business--is prime minister. An aide to current 'Gazprom'
director Rem Vyakhirev said recently that, when there are problems in his
sector, 'they (the federal government) do not tell us what to do, we tell them
what needs to be done.'11

Numerous public sources noted Chernomyrdin's
specific role in ensuring that the gas monopoly paid minimal taxes. One expert
estimated that Gazprom's tax breaks cost the Russian budget up to $30
billion12--an immense sum relative to total
Russian revenues and expenditures (for example, Russia received less than $15
billion from international financial institutions in the four-year period from
1992 to 1995). This lost revenue had a grave effect on the government's ability
to cope with the struggling Russian economy. In this sense, the Clinton
administration's uncritical support for Chernomyrdin directly undermined the
U.S. policy of encouraging Russia to increase tax collections.

Gazprom in return had provided funds for
Chernomyrdin's parliamentary campaign in December 1995.13

In 1998, a book by Russian security officer
Valery Streletsky added further public evidence that Chernomyrdin tolerated
massive corruption within his government. The author, who headed a unit tasked
with investigating government corruption, states that Chernomyrdin's long-time
chief of staff, Gennady Petelin, amassed tens of millions of dollars in foreign
bank accounts.14 The author further reported
that Chernomyrdin's own chief of security personally told him:

Viktor Stepanovich [Chernomyrdin] relates
seriously to cadres. This practice has been worked out over years. He thinks:
let a good person steal 10% but do what is necessary with the other
90%.15

MORE "BULL****"?:
Vice President Al
Gore on Meet the Press, July 16, 2000, where he denied scrawling
"Bull****" across a CIA report of Chernomyrdin's corruption in 1995, but
inadvertently acknowledged both the existence of the specific report and his
categorical dismissal of it. Newsmakers/Mark Wilson

Chernomyrdin was recently brought into court to
testify about his role in the illegal export of $180 million worth of diamonds
and gold during his administration.16 As
this report was being prepared, Russian press accounts quoted Swiss police
sources as stating that tens of millions of dollars had been transferred into
Swiss bank accounts controlled by Chernomyrdin during his tenure as prime
minister.17 The transfers were made by
Mercata Trading, a firm linked to Mabetex, which is at the center of a major
kickback scandal involving $300 million in Russian government contracts,
including the scandal-ridden renovation of the Kremlin itself.

Given that Chernomyrdin served as prime minister
for five and a half years, his embrace of corruption fundamentally compromised
Russia's efforts at economic reform. In this way, the Clinton
administration--and Gore personally--contributed not only to Russia's failure to
overcome corruption, but to the spread of corruption throughout the Russian
political system.

Gore's failure to heed U.S. intelligence by
showing discretion about Chernomyrdin and other corrupt officials in his public
diplomacy--his willful blindness, and that of other senior administration
officials to the overwhelming public and classified evidence of official Russian
corruption--sent precisely the wrong signal to U.S. intelligence analysts, who
had proven their regional expertise by accurately predicting the collapse of the
Soviet Empire.18

The New York Times reported the effect of
the vice president's disdain for politically inconvenient
intelligence:

The incident has fostered a perception in the
agency's ranks that the Administration is dismissive of 'inconvenient'
intelligence about corruption among the Russian leaders with whom White House
and State Department officials have developed close personal
relationships.19

One intelligence official has stated publicly:
"They never want to hear this stuff." Another commented: "They don't ignore it.
But they don't want to have to act on it." Current and former U.S. intelligence
officials expressed similar views:

"'It [Chernomyrdin's corruption] was all laid
out for Gore [in 1995] ... and he didn't want to hear it. Our government knew
damn well what was happening.'"20

Senior administration officials including Gore
"definitely didn't want to know about corruption around Yeltsin. That was
politically uncomfortable."21

The former Chairman of the National Intelligence
Council, Fritz Ermarth, who retired from the CIA in 1998, wrote of senior
Clinton administration officials that they had a "disdain for analysis about
corruption of Russian politics and their Russian partners ... "22 Ermarth notes that this disdain was particularly strong
during the critical 1993-96 period.

They Know That We
Know

Russian assessments of what the U.S. knew about
Russian corruption also undermine the Clinton administration's claims of
ignorance. For example, a report by a think tank associated with the Russian
military, the Russian Institute of Defense Studies, states
specifically:

Special services of Western countries have
full access today to all documentation of joint ventures and other partners of
Russian exporters, they have the originals of financial documents, they are
knowledgeable regarding the movement of commodity resources and financial
flows, they have information on bank account numbers of the 'new Russians,'
and they know about their real estate and securities transactions
abroad.

The report, issued contemporaneously with the
Gore "bull****" incident, further stated:

And it should be understood that ... the
outflow of resources and capital from Russia abroad in the form in which it is
being accomplished today is criminalized to the highest degree and represents
not only a violation of domestic laws but also the grossest violation of laws
of the western countries themselves.23

Yet even as publicly available Russian sources
concluded that information about the full extent of Russian official corruption
was known to Western intelligence services, the top Clinton administration
policy makers chose to ignore it.

A System for Rejecting
All 'Inconvenient' Intelligence

Vice President Gore has hedged his denial of the
"bull****" incident, saying, "I don't think" that "[I] ever wrote a message of
that kind." At the same time, however, he and other senior Clinton-Gore
officials have publicly dismissed the CIA reports. Indeed, when asked whether
"bull****" had ever been scrawled across a CIA report, Gore plainly referred to
a specific CIA report, saying , "whoever sent that over there
[could not have] expected the White House to be impressed with it ...
it was a very sloppy piece of work."24 Other administration officials dismissed the CIA reports
as "rumor," and denied that the CIA had provided "conclusive
proof."25

But agency reporting is necessarily based on
intelligence sources, often covert. By conveniently demanding a "smoking gun"
whenever they sought to suppress uncomfortable facts, Gore and other top Clinton
administration officials established standards of proof that were impossible to
meet. The result was a rigged system for rejecting all "inconvenient"
intelligence whenever it suited the preferences of the White House.

Such misuse of intelligence data deepened the
mistrust between the White House and the Intelligence Community. CIA officials
have described the resultant "frequent tensions between the agency and policy
makers over reporting."26 According to one
CIA official:

These people [the Clinton-Gore administration]
have expected something no one in the intelligence community could
provide--judicial burden of proof. ... Did we have an authenticated videotape
of the person actually receiving a bribe? No. But reporting from established,
reliable sources was written off as 'vague and
unsubstantiated.'27

CIA officials have described the intelligence
information concerning Chernomyrdin that was provided to Gore as "more detailed
and conclusive than allegations of bribery and insider dealing that have been
made in the Russian media and elsewhere."28
Yet when asked--as recently as July 2000--whether Chernomyrdin is corrupt, Gore
replied: "I have no idea."29

False Choices

Recently, Leon Fuerth, the vice president's
national security adviser, has tried to play down the widespread intelligence
community condemnation of Gore's disdain for official reporting by arguing that
the problem of corruption "was on the [Gore-Chernomyrdin] Commission
agenda."30 But it is difficult to see how a
Gore-Chernomyrdin Commission could meaningfully attack the problem of
Chernomyrdin's own corruption, or that of his associates. Indeed, addressing
corruption in partnership with Chernomyrdin, whom another former Russian
official called "the chief mafioso of the country,"31 was tantamount to endorsing Russia's corrupt status
quo.

Gore's lavish praise for Chernomyrdin, and his
intentional personalization of their relationship make it equally impossible to
accept Fuerth's claim that Gore had no alternative but to deal with the prime
minister. (The Clinton administration, Fuerth stated, had either to "boycott the
government of Russia" or "deal with [Chernomyrdin]"32--an obviously false choice.) Gore's embrace of
Chernomyrdin and the ever-larger role assigned to the Gore-Chernomyrdin
Commission went far beyond what was justified by what the U.S. government knew
of him, and by the Commission's meager results.33

The pro-forma inclusion of official corruption
"on the agenda" of the Gore-Chernomyrdin Commission, along with scores of other
topics large and small, is quite different from making its eradication a
priority. The content of the Clinton administration's policy on Russian
corruption has amounted to general disinterest. It has offered lip
service34 while failing to act on specific
problems such as money-laundering until forced by events.

The very serious allegations made against the
Russian Prime Minister and Vice President Gore's partner in the
Gore-Chernomyrdin Commission, amply set forth in official U.S. intelligence
reports, were simply rejected by the Clinton administration as the scope of the
issues assigned to the Gore-Chernomyrdin Commission was steadily increased.
Indeed, to the extent that President Clinton seemed willing to give an
ever-increasing role in the U.S.-Russian relationship to the Gore-Chernomyrdin
Commission, Gore stood to benefit from maintaining his continued close personal
relationship with Chernomyrdin.

In light of Chernomyrdin's notorious corruption,
the expansion of the Gore-Chernomyrdin Commission's role and the decision to
make it the fulcrum of U.S. policy were a serious error that abetted the growth
of official corruption and crime in Russia, to the detriment of the Russian
people and the longer-term U.S.-Russian relationship.35 Broader, less centralized cooperation with the Russian
government and a less fulsome embrace of Chernomyrdin could have averted these
problems, and kept the United States on the side of reform.

The Larger
Pattern

Vice President Gore's approach to evidence of
Chernomyrdin's corruption is a microcosm of the approach he and the Clinton
administration took towards the problem of corruption, which extended far beyond
Viktor Chernomyrdin.

As Wayne Merry, a senior official at the Moscow
Embassy during the first part of the Clinton administration, testified in
September 1999:

It is now asked, "What did our policy makers
know about corruption in Russia and when did they know it?" I can only say
that anyone involved with Russia--in government or on the street--knew about
it all along. There was no secret. Even if the Embassy and the CIA had not
written a word, the Western press covered the story fairly well, while the
Russian media reported on corruption constantly ... . Anyone who wanted to
know, knew. The real questions are, "Did our policy makers care, and what did
they do about it?"36

The answer to these questions is clear, not only
in the case of Chernomyrdin but in many other cases as well. The Clinton
administration repeatedly ignored evidence and sought to politicize the
analytical process, routinely dismissing or stifling reporting that did not
support their policies or fit their political requirements.

Donald Jensen served as a second secretary in
the U.S. embassy in Moscow from 1993-1995 and returned to Moscow in 1996. During
his 1996 work at the embassy, Jensen wrote a 10-page cable identifying Russian
oligarchs who were using their government connections to win control of prized
enterprises. According to Jensen, his cable was killed by a Clinton
administration Treasury official who worked in the Moscow embassy.

The administration official, Jensen stated,
justified suppressing factual reporting about Russian official corruption by
arguing that "if the memo were sent to Washington, it could be leaked to the
press, and that would undermine U.S. policy."37

Jensen told "Frontline" that the cable was never
sent because "it was bad news, and we [the Clinton administration] were intent
on making our policies work."38 Moreover, he
added:

if corruption was shown to exist in any
significant degree ... that was criticism of the [Clinton] policy because we
had argued for a number of years that these things--these policies--were for
the good of Russia, and that if you now say that the government's completely
corrupt, that it's linked directly or indirectly with organized crime, you're
essentially saying the policy the U.S. government has followed over the past
few years was wrong.39

Thomas Graham, the head of the U.S. Embassy's
political section in Moscow from 1994-1997, confirmed Jensen's account in an
interview in the Washington Post.40

In the same article, Graham's predecessor in
Moscow, Wayne Merry, said the embassy, "was under constant pressure to find
evidence that American policy was producing tangible successes, especially after
the creation of the 'Gore-Chernomyrdin' working group." Merry also said that the
Clinton administration's desire to make the Gore-Chernomyrdin commission a
success prevented reporting "about the realities of crime and corruption ...
failures in the privatization and general bad news."

Graham argues compellingly that the dismissal of
such reporting by senior Clinton administration officials was a direct
consequence of their personal relationships with a handful of Russian
officials.41 Because senior Clinton
administration officials became so close with their counterparts in the Russian
government, he suggests, over time they came to trust their Russian
interlocutors more than reports from within their own government. Thus, senior
Clinton administration officials came to rely upon their Russian partners not
only for information, but for analysis and policy recommendations as well; as a
result, the CIA, the embassy staff, and other independent sources of information
were marginalized.

At times the Clinton administration has
positively hindered the uncovering of official corruption: the Swiss government
has recently complained of U.S. refusal to cooperate with its criminal
investigations into official Russian corruption. Laurent Kasper-Ansermet, a
Swiss investigative magistrate, formally requested assistance from the U.S.
government in his investigation into the Bank of New York case in September 1999
and began a series of detailed requests for information and assistance in
January 2000, but to date has received little cooperation.42

Groupthink

An article in the National Journal
suggests that the Clinton administration's policy toward Russia may be a classic
case of "groupthink," a psychological process in which "wishful thinking, shaky
premises, and a tendency to deny facts at odds with the cognitive underpinnings
of a course of action to which a group is committed" can lead to flawed
decision-making and policy failures.43
Moreover, because the decision-makers involved in "groupthink" are unable to
admit their own errors, they become trapped in a "tangled muddle of
self-justification, denial, and distortion." The National Journal
analysis attributes much of the problem in Russia policy to Deputy Secretary of
State Strobe Talbott and Treasury Secretary Lawrence Summers. They, like Vice
President Gore, were unwilling, and eventually unable, to distinguish the
imagined world of their own policies from the real world of an increasingly
desperate Russia. As a result, the Clinton administration continued, and even
intensified, activities that were plainly destructive.